Managerial Accounting Is an Activity That Helps Managers Determine Costs

question 25

True/False

Managerial accounting is an activity that helps managers determine costs of products and services, plan future activities, and compare actual to planned results.

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Definitions:

Net Operating Income

The profit a company generates from its operations, before taxes and interest, calculated as gross income minus operating expenses.

Return On Investment

A performance measure used to evaluate the efficiency or profitability of an investment, calculated as net profit divided by the cost of the investment.

Operating Assets

Assets that are used for the day-to-day operations of a business, including cash, inventory, and property, plant, and equipment.

Minimum Required Rate

The lowest acceptable rate of return on an investment demanded by an investor, considering risk factors.